Mastering the Art of the Car Business

Mastering the Art of the Car Business

If you are having success in this business, you are no stranger to the fact

that you have to better than average at many things. This is a multi-sided

Rubik’s Cube of a business if there ever was one. One weak area is all it

takes to get your cash flow pipes seriously plugged.

Case Study: This might sound like a plug at first, but this is as good of an

example as it gets. In our business for example we tackle everything from

lead-to-lender to keep the client’s heart rate up. We started building Web

sites back in 1999 because we found a way to create a certain visually-

induced reaction in a prospect’s brain that makes them want to submit a sales

lead. That was great and today our average Web site conversion rate is around

30 percent of visitors that submit leads. The rest of the industry still

hovers around 2.3 percent by comparison. So yippee for us right? Not so fast.

A lot of vendors have great products. Just because we can dump 15 times the

leads over our dealer’s heads than our competition doesn’t mean they’re going

to sell any cars. If you’re a dealer, you know exactly what I mean.

So for our next step we decided to go with only one dealer in each market

area and put a particular focus on special finance. So in a world where BDC

training and systems consist of “Debbie The Time Life Operator Syndrome” and

outsourced BDC programs are a sure-fire ticket to self-destruction, we

decided to create the Mastery Council BDC and Internet sales system. The

result was a system so effective that I can walk into any of our dealerships

and document a 90 percent lead contact rate, a 96 percent appointment set

rate and an 80 percent show rate. Yes you heard that correctly, and no, that’

s not fiction. That’s 69 percent of all leads in the door.

So now we have more leads than would otherwise be possible and the best BDC

and sales program that ever grazed planet earth, so now our dealers should be

in the money right? Well yes for some, but then up pops another issue.

Advertising: It doesn’t matter how well your Web site converts if you don’t

know how to advertise it. By the time I would get done going through

advertising invoices and of course solving the traffic problem, the dealer in

question would have already lost thousands in gross. So the next step based

on Joe McCloskey’s good advice from Colorado was to start an in-house

advertising agency. This way we could solve media problems before they happen

and have our ear to the ground 24/7. We, of course, were already writing all

the creative anyway so why not? I was reluctant at first, mainly because I

think agencies are a horrible idea for some very solid reasons, but in the

end we launched HyperDrive Media LLC. It was a smart move that resulted in

some serious Ninja Jedi advertising methods, which has made our dealers a

grip of cash.

So now there should be nothing standing in the way of massive volumes right?

Yes for many, but then something else popped up in some of our stores.

In the end it doesn’t matter how many leads you have, how well you dominate

the market in special finance or how many bodies you drag in the door if your

special finance penetration is suffering and you can’t get enough people in

cars. Okay, so now we already have three companies all of which have been

fortunate and smart enough to be the best of their kind anywhere. So now what

were we supposed to do with this challenge?

Well, we found the best working special finance guy in the country, stole him,

moved him to one of our stores, paid him too much and watched how he did.

Then we moved him in-house and made him the head of a new division dedicated

to special finance training and more importantly deal monitoring. This has

led to special lender arrangements exclusively for our dealer group and is

resulting in a landslide of success as we build our open markets but that’s

not the point.

The point is, we started out as a Web development company almost 10 years ago.

Since then we’ve had to design and launch three record-setting companies and

four key programs surrounding Web site conversion, BDC/Internet sales,

management and leadership training, strategic advertising placement, and now

special finance coaching just to insure that the dealers could take full

advantage of the program, sell cars and own the special finance markets in

their DMA’s. You gotta be kidding me right?

For any dealer out there, just like us, mastering the car business is not

about being a jack-of-all-trades; it’s about being good enough as an

organization in each of the specific areas that make up your business to be

better than the guy down the street. For us, we can’t afford to be second

best at anything we do, and trust me we’re not. There isn’t a company or a

trainer in the industry that does any of the things we do that we couldn’t

mow over in the street without breaking a sweat. As a dealer, that should be

your goal regarding your competition. I am absolutely resolved and convicted

to the best-of-the-best for our dealer group and you should be resolved to be

best for yourself? Being competitive means just being about as good as

everyone else, and for you that shouldn’t be good enough.

Here are some insights on some of the subjects we specialize in that may help

you establish a positive outlook for the months ahead.

Special Finance: Contrary to what you may hear, the lending world isn’t

evaporating. As one lender’s program constricts, another’s opens up to take

over the other one’s market share. Currently we’re negotiating faster call

backs, more approvals, lower fees, faster funding and deeper overall special

finance penetration than ever before. You should be experiencing the same.

Internet Leads: Our lead composite in all of our markets have also been

stronger than ever, meaning that we’re seeing better credit overall and a

stronger “intention to buy.” Our leads are derived in an unusual way, but

still it should be a reflection of the market. If your people are dragging

nothing but the worst credit in the door, they’re probably losing control of

the buyers on the phone.

BDC Expectations: Let me make this blisteringly clear. You should be

realizing an absolute minimum of 45 percent of all leads ending up as

showroom visits and as high as 69 percent. BDCs aren’t cheap and they should

be performing to your expectations.

Advertising: Yes we’re in a political season and I’m sure your ad reps are

having a good time making that abundantly clear to you. My advice is to buy

deep, buy cheap and keep your finger on the cancellation clause if your

compass doesn’t point North at some point. Our buys have also been better

than ever. Just ignore the rate hype and negotiate with a long-term vision

and it will work. We also like to document consistent budget increases from

neighboring markets, which brings out the hunger in any media company.

Have a great month and thanks for tuning in.